4 ms·

Thus demonstrating the sheer idiocy of crypto-currencies -- they burn real resources on what is essentially bookkeeping.

smtddr 13y ago
Keep in mind that the mining won't last forever. Bitcoin mining has already become all but unreachable[1] for normal household resources. Litecoin's blockchain is still new enough that it hasn't reached that point yet. Just like BTC, LTC was first just CPU, now it's GPU, then ASIC will show up then finally it'll just be pools for 0.00003 LTC a week or you'll need a freakin' Pixar+Dreamworks+ILM SuperPowered-RenderFarm or something that no ordinary person can reasonably afford access to. 1. http://www.ibtimes.com/secret-bitcoin-mine-chinese-facility-uses-boiling-liquid-cool-massive-computers-generate-bitcoins http://www.ibtimes.com/secret-bitcoin-mine-chinese-facility-...
- galactus 13y ago
  Doesnt the bitcoin network need mining to work? As far as I understand it, mining needs to be done forever, even if its impossible to collect new coins.
  - smtddr 13y ago
    I don't think it does. Bitcoin can be split to the eighth decimal place, IIRC. If bitcoins become hard to get, the price should go up, then needing one whole btc to buy something should get less common. Or maybe you're right and years from now it'll all collapse and some other improved crypto-coin will have to take its place. I guess we'll find out, because there is a hard-limit on how many btcs can be obtained(21 million to be exact) by mining, so when that runs out...
    - empraptor 13y ago
      From what I understand, the work that the miners do currently needs to continue for transactions to be added to the P2P ledger. This is why whoever wants to process a transaction will need to pay a fee that goes to the miner once Bitcoins stop getting generated to reward mining in 2016 or something. Otherwise, people who are in it for the profit will stop doing the "mining".
    - maxerickson 13y ago
      Mining is fundamental to the operation of bitcoin. "Mining" just means finding a satisfactory hash for the next block of transactions. People pursue mining because of the rewards built into bitcoin, transaction fees are supposed to eventually replace that reward.
- drzaiusapelord 13y ago
  Okay then someone starts up some other crypto coin. It doesn't ever have to end. Boom, bust, and hopefully cash out before the bust. GPU shortages and breathing in extra coal emissions continues.
- wmf 13y ago
  Bitcoin mining has already become all but unreachable for normal household resources. Sure, but the total energy being "wasted" by Bitcoin mining globally may still be increasing.
aianus 13y ago
So do the banks' and payment processors' datacenters and hundreds of thousands of employees. In addition, when the market becomes more efficient we'll see all commercial mining done in places like Iceland that have dirt-cheap renewable energy sources and cheap cooling.
mrb 13y ago
Common misconception. Crypto-currency mining is not wasteful compared to other financial activities: https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_of_energy_and_harmful_for_ecology https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_o...
- lukifer 13y ago
  I like to think in terms of the energy wasted by all the bank employees driving to work every day. If even 10% of those made redundant by a distributed banking system were able to start working from home doing other things, I'd guess it was a net win.
  - sentenza 13y ago
    Sorry to drag out old slashdot nomenclature, but what you are saying is: 1. Use cryptocurrency 2. Fire 10% of bank employees 3. ??? 4. Profit! I am no expert on banking, but I'd be really surprised if 10% of banking employees were doing things that become unneccessary with cryptocurrencies. Most steps that can be automated are automated already, and the number of sysadmins certainly won't decrease. That is, here in Europe. I've heared that there is some inefficient weirdness going on with "wire transfers" in the US, but that is not the case here.
    - lukifer 13y ago
      Actually, what I said (or implied) is: fire most bank employees, all of whom will end up doing something more useful, and 10% of whom will no longer need to drive to work every day. :)
- drzaiusapelord 13y ago
  Except banks hire employees, pay taxes, provide a service, build ATMs, offer lines of credit, provide consumer protections, etc. Thats 100% different than neckbeards going through garbage dumps looking for lost coins and kids buying GPUs with daddy's credit card for bragging points. Shame this isn't just arbitrary math instead of contributing to something like folding@home.
DennisP 13y ago
In the winter the waste heat can offset your heating bill. Now we just need someone to use mining chips as the heating elements in heat pumps and we could have energy-neutral mining year-round.
- vilts 13y ago
  That's exactly what I'm currently doing. Six 7950's are running and keeping the 70 sq m first floor rather warm when I'm not here. Outside temp is around 0 degC. Even if the coin prices drop so much that it breaks even in electricity, it's still good "free" heating. Hopefully the rigs pay themselves before the price drops that much.
- sentenza 13y ago
  For some of us, that's a horrible deal though. The average price for electricity here in Germany is 0.264€/kWh.
Dwolb 13y ago
Is it so different than bookkeeping burning real resources on bookkeeping? Paper, ink, accounting software, Excel, all use resources.
whyenot 13y ago
That is not true of all cryptocurrencies. See for example Peercoin which uses proof of stake instead of proof of work.
oakwhiz 13y ago
Alternatively, perhaps it is demonstrating and concentrating the raw bookkeeping costs of capitalism itself.
erikpukinskis 13y ago
This is wrong in several ways: 1) The total electricity used in Bitcoin mining is pegged to the bitcoin supply, which is decreasing towards zero. So the amount of electricity used should be decreasing. It may temporarily increase while prices go up, but the long term trend will be towards zero. And transaction fees shouldn't change this too much. Competition amongst miners should eventually drive those towards zero too. 2) It's not just bookkeeping that's happening, it's dispute resolution. Currently your financial disputes are solved by calling your credit card company and having them deal with it. There's a whole network of dispute resolution services going all the way up to the SCOTUS. All of which uses resources. Bitcoin does all that through mining. 3) It's not actually that much power. The hashrate is 7m GH/s. Let's assume 2 watts per GH/s, that's 14 megawatts. You could power that with three big wind turbines.
- maxerickson 13y ago
  If there is zero electricity being used to mine bitcoin, it has failed and will be worth nothing. Describing the relationship as 'pegged' is also sort of aggressive. A better statement would be that most people will only spend electricity if they are able to recover that cost in bitcoin (and probably a small profit). So there is some upper limit of mining activity to be expected given the current bitcoin price, size of reward and typical efficiency of mining hardware (cost of electricity will also factor in, but that should be relatively stable).
  - erikpukinskis 13y ago
    Except the lower limit is pretty close to the cost of electricity too, since there are lots of opportunistic miners interested in bringing more capacity online if there's a profit to be made. So, if the upper bound and lower bound are pretty close, what's wrong with saying "pegged"?
    - maxerickson 13y ago
      Things haven't been stable enough for that to be true. For example, you've put the current electricity consumption at something like $100,000 a day (14,000 kw * 24 hours * $0.20 = $67,200). The mining reward is closer to $3 million per day.

smtddr 13y ago

Keep in mind that the mining won't last forever. Bitcoin mining has already become all but unreachable[1] for normal household resources. Litecoin's blockchain is still new enough that it hasn't reached that point yet. Just like BTC, LTC was first just CPU, now it's GPU, then ASIC will show up then finally it'll just be pools for 0.00003 LTC a week or you'll need a freakin' Pixar+Dreamworks+ILM SuperPowered-RenderFarm or something that no ordinary person can reasonably afford access to. 1. http://www.ibtimes.com/secret-bitcoin-mine-chinese-facility-uses-boiling-liquid-cool-massive-computers-generate-bitcoins http://www.ibtimes.com/secret-bitcoin-mine-chinese-facility-...

galactus 13y ago
Doesnt the bitcoin network need mining to work? As far as I understand it, mining needs to be done forever, even if its impossible to collect new coins.
- smtddr 13y ago
  I don't think it does. Bitcoin can be split to the eighth decimal place, IIRC. If bitcoins become hard to get, the price should go up, then needing one whole btc to buy something should get less common. Or maybe you're right and years from now it'll all collapse and some other improved crypto-coin will have to take its place. I guess we'll find out, because there is a hard-limit on how many btcs can be obtained(21 million to be exact) by mining, so when that runs out...
  - empraptor 13y ago
    From what I understand, the work that the miners do currently needs to continue for transactions to be added to the P2P ledger. This is why whoever wants to process a transaction will need to pay a fee that goes to the miner once Bitcoins stop getting generated to reward mining in 2016 or something. Otherwise, people who are in it for the profit will stop doing the "mining".
  - maxerickson 13y ago
    Mining is fundamental to the operation of bitcoin. "Mining" just means finding a satisfactory hash for the next block of transactions. People pursue mining because of the rewards built into bitcoin, transaction fees are supposed to eventually replace that reward.
drzaiusapelord 13y ago
Okay then someone starts up some other crypto coin. It doesn't ever have to end. Boom, bust, and hopefully cash out before the bust. GPU shortages and breathing in extra coal emissions continues.
wmf 13y ago
Bitcoin mining has already become all but unreachable for normal household resources. Sure, but the total energy being "wasted" by Bitcoin mining globally may still be increasing.

aianus 13y ago

So do the banks' and payment processors' datacenters and hundreds of thousands of employees. In addition, when the market becomes more efficient we'll see all commercial mining done in places like Iceland that have dirt-cheap renewable energy sources and cheap cooling.

mrb 13y ago

Common misconception. Crypto-currency mining is not wasteful compared to other financial activities: https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_of_energy_and_harmful_for_ecology https://en.bitcoin.it/wiki/Myths#Bitcoin_mining_is_a_waste_o...

lukifer 13y ago
I like to think in terms of the energy wasted by all the bank employees driving to work every day. If even 10% of those made redundant by a distributed banking system were able to start working from home doing other things, I'd guess it was a net win.
- sentenza 13y ago
  Sorry to drag out old slashdot nomenclature, but what you are saying is: 1. Use cryptocurrency 2. Fire 10% of bank employees 3. ??? 4. Profit! I am no expert on banking, but I'd be really surprised if 10% of banking employees were doing things that become unneccessary with cryptocurrencies. Most steps that can be automated are automated already, and the number of sysadmins certainly won't decrease. That is, here in Europe. I've heared that there is some inefficient weirdness going on with "wire transfers" in the US, but that is not the case here.
  - lukifer 13y ago
    Actually, what I said (or implied) is: fire most bank employees, all of whom will end up doing something more useful, and 10% of whom will no longer need to drive to work every day. :)
drzaiusapelord 13y ago
Except banks hire employees, pay taxes, provide a service, build ATMs, offer lines of credit, provide consumer protections, etc. Thats 100% different than neckbeards going through garbage dumps looking for lost coins and kids buying GPUs with daddy's credit card for bragging points. Shame this isn't just arbitrary math instead of contributing to something like folding@home.

DennisP 13y ago

In the winter the waste heat can offset your heating bill. Now we just need someone to use mining chips as the heating elements in heat pumps and we could have energy-neutral mining year-round.

vilts 13y ago
That's exactly what I'm currently doing. Six 7950's are running and keeping the 70 sq m first floor rather warm when I'm not here. Outside temp is around 0 degC. Even if the coin prices drop so much that it breaks even in electricity, it's still good "free" heating. Hopefully the rigs pay themselves before the price drops that much.
sentenza 13y ago
For some of us, that's a horrible deal though. The average price for electricity here in Germany is 0.264€/kWh.

Dwolb 13y ago

Is it so different than bookkeeping burning real resources on bookkeeping? Paper, ink, accounting software, Excel, all use resources.

whyenot 13y ago

That is not true of all cryptocurrencies. See for example Peercoin which uses proof of stake instead of proof of work.

oakwhiz 13y ago

Alternatively, perhaps it is demonstrating and concentrating the raw bookkeeping costs of capitalism itself.

erikpukinskis 13y ago

This is wrong in several ways: 1) The total electricity used in Bitcoin mining is pegged to the bitcoin supply, which is decreasing towards zero. So the amount of electricity used should be decreasing. It may temporarily increase while prices go up, but the long term trend will be towards zero. And transaction fees shouldn't change this too much. Competition amongst miners should eventually drive those towards zero too. 2) It's not just bookkeeping that's happening, it's dispute resolution. Currently your financial disputes are solved by calling your credit card company and having them deal with it. There's a whole network of dispute resolution services going all the way up to the SCOTUS. All of which uses resources. Bitcoin does all that through mining. 3) It's not actually that much power. The hashrate is 7m GH/s. Let's assume 2 watts per GH/s, that's 14 megawatts. You could power that with three big wind turbines.

maxerickson 13y ago
If there is zero electricity being used to mine bitcoin, it has failed and will be worth nothing. Describing the relationship as 'pegged' is also sort of aggressive. A better statement would be that most people will only spend electricity if they are able to recover that cost in bitcoin (and probably a small profit). So there is some upper limit of mining activity to be expected given the current bitcoin price, size of reward and typical efficiency of mining hardware (cost of electricity will also factor in, but that should be relatively stable).
- erikpukinskis 13y ago
  Except the lower limit is pretty close to the cost of electricity too, since there are lots of opportunistic miners interested in bringing more capacity online if there's a profit to be made. So, if the upper bound and lower bound are pretty close, what's wrong with saying "pegged"?
  - maxerickson 13y ago
    Things haven't been stable enough for that to be true. For example, you've put the current electricity consumption at something like $100,000 a day (14,000 kw * 24 hours * $0.20 = $67,200). The mining reward is closer to $3 million per day.